Quick Bite | NAB Business Survey: Conditions Ease, Confidence Rises

According to the latest NAB monthly business survey released on the 9^{th of} July, Australian business conditions edged down in June, continuing the long running trend since peaking in late 2022. Business conditions fell 2pts to +4 index points, with declines experienced in wholesale, construction, manufacturing and finance, business & property, with the non-mining goods sectors now clearly softer than the services sectors. Retail, despite increasing in the month, remains weakest (and the only industry in negative territory) in trend terms. 

Business confidence was driven by a broad-based increase across industries, rising 6pts in the month and to its highest level since early 2023. The increase in confidence was broad-based across industries, led by an increase in manufacturing.

While the activity side of the survey has shown a consistent easing, capacity utilisation remains high. This all lines up with the slowing in activity we have seen more broadly but also with a still high level of demand relative to supply in the economy. Consistent with this, prices and cost growth generally remain elevated. Encouragingly, both labour and purchase cost growth largely reversed last month’s increase, and output price growth also slowed.  

NAB’s Head of Australian Economics, Gareth Spence said “overall, our take on the survey is that it continues to signal another soft quarter in Q2. But also, that capacity utilisation is still high with demand and supply yet to fully normalise. Price pressures continue to ease in a trend sense though the data certainly remains bumpy.”

Source: NAB Economics